Debt Advisory's review of 2017 and outlook for the debt markets in 2018

24 Pages·2017·1.69 MB·English

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Look back,
look forward
Debt Advisory Group
January 2018
kpmg.com/uk
0 | Look back, look forward © 2018 KPMG LLP, a UK limited liability partnership and a member firm
of the KPMG network of independent member firms affiliated with
KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved.
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As you settle down back to work
“ after a (hopefully) relaxing Christmas
break, we wanted to usher in the
New Year with some news and
views for you from the debt world
about the year just gone and the
year ahead.
I hope that you find them interesting
and that 2018 brings you opportunity
and success.
”
Nick Dodd
UK Head of Debt Advisory, Manchester
© 2018 KPMG LLP, a UK limited liability partnershSiph aonrdt ah meeamdblbienre fi ir|m 1
of the KPMG network of independent member firms affiliated with
1 | Look back, look forward KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved.
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Contents
2017 snapshot | 4
Look back
Headline deals of 2017 | 5
Introduction to 2018 | 9
Look forward
Market and sector focus | 11
A global view | 19
Key contacts | 21
© 2018 KPMG LLP, a UK limited liability partnership and a member firm
K©ofP 2tMh0eG1 8 KI nPKtMPeMrGnGa nt ieLotLnwPaol, rCak o UooKfp ielnimrdaetitipveedn (ld“iaeKbnPiltiM tmyG ep maInrtbtneeerrnr fsaihtrimiopns a anl”fdf)i ,la ia m tSeewdm iwsbsite her nftiritmy. KoAfPl l tMrhigeGh KtIsnP tMreerGsnea nrtveioetnwda.ol rCko oofp ienrdaetipven (d“eKnPtM mGe mInbteerrn faitrimonsa al”ff)i,l ia tSewd iwssit he ntity. Look back, look forward | 2
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Look
back
3 | LSohokrt bhaecakd, lilnoeok forward © 2018 KPMG LLP, a UK limited liability partnership and a member firm
of the KPMG network of independent member firms affiliated with
KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved.
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2017
snapshot
2017 was another year
marked by uncertainty
both domestically
and internationaly. >£12 billion
Historically, such tremors
may have been expected to Value of debt
significantly impact lender
raised
appetite and the terms
achievable by borrowers,
David Reitman but the reaction during the
Partner, London year was predominantly
benign
and largely ‘business as usual’.
We may question whether this will continue, but
whatever awaits in the year ahead, 2017 produced
another strong year for the KPMG Debt Advisory
team, advising our clients through complex
transactions and helping them to navigate the
changing financing landscape.
Over the next few pages we highlight a selection of
our standout transactions from 2017. 75
Number of
clients
advised
32
Professional
advisors
across the UK
© 2018 KPMG LLP, a UK limited liability partnership and a member firm
of the KPMG network of independent member firms affiliated with
KPMG International Cooperative (“KPMG International”), a Swiss entity. Look back, look forward | 4
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Headline deals of 2017
We advised on a
Ian Macleod Distillers – Asset-based
number of market- refinancing
leading debt Deal led by Bruce Walker, Edinburgh
transactions last year We advised Ian Macleod, the independent
family-owned distiller, on the refinancing of its
existing asset-based lending facilities, as well
as raising the additional funding to support its
growth plans.
— We led a competitive process and the
company secured a new £80 million
committed inventory-only asset-based
facility on competitive terms with
improvements in margin, financial
covenants and overall flexibility compared
to the company’s previous facility.
— The five year deal also includes a £10
million accordion option, providing
additional growth firepower.
IGas – Restructuring
Deal led by Tim Nicholson, London
— IGas, one of the largest onshore oil and gas E&P
businesses, was facing liquidity and covenant
pressures under its $160 million secured and
unsecured bonds. Complexity was increased by
inherent oil price volatility, having multiple creditor
groups (with competing objectives) and a hedge-
fund backed investor (who held a blocking stake in
the bonds) pursuing an alternate strategy for the
Group.
— We helped the company deliver an innovative
restructuring approach and stakeholder
management programme that attracted new equity
capital to the group, restructured and significantly
reduced debt on improved terms, and successfully
gained the support of all stakeholders (including the
hedge-fund backed investor) to help deliver the
group’s strategy. The restructuring created a strong
and flexible platform to help deliver considerable
value from its portfolio.
© 2018 KPMG LLP, a UK limited liability partnership and a member firm
5 | Look back, look forward oKfP tMheG KInPtMerGna ntieotnwaol rCko oofp ienrdaetipveen (d“eKnPtM mGe mInbteerrn faitrimonsa al”ff)i,l ia tSewd iwssit he ntity.
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Nisa – Asset-based lending
Deal led by Chris Lloyd, Leeds
— We acted as lead adviser to Nisa Retail Limited
in securing a £120 million Asset Based Lending
debt package.
— By converting the existing facilities to a full ABL
structure, the refinancing has allowed the
business to increase its debt facilities with the
potential for further support if required. In
addition, the new structure provides cheaper
and more flexible finance than under Nisa’s
previous facilities.
Avant Homes – Incremental bank financing
Deal led by John Miesner, London
— Avant Homes is a developer of contemporary design led mid-market
family homes in the North of the UK and was looking to expand its bank
facility to accommodate its cornerstone ambitions to build 2,000 houses
per annum in the short term; with further growth over the next 5 years.
— We advised Avant on the process to source additional lenders and add
flexibility to its existing bank agreement. The £200 million facility was
provided by a club of four banks and offers significant capacity to support
the business through the next stage of its growth plans.
Giacom – Acquisition financing
Deal led by Chris Lloyd, Leeds
— We advised private equity firm Livingbridge on
the debt financing to support its investment in
Giacom, a specialist cloud services marketplace
which provides cloud software, infrastructure
and support services to IT consultants serving
the SME market.
— This followed a lender education process
undertaken for Giacom and LDC, the private
equity sponsor which exited its majority
shareholder position.
— This marks the second Giacom financing
transaction on which we have advised in twelve
months.
© 2018 KPMG LLP, a UK limited liability partnership and a member firm
of the KPMG network of independent member firms affiliated with
Look back, look forward | 6
KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved.
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Look
forward
7 | Look back, look forward © 2018 KPMG LLP, a UK limited liability partnership and a member firm
of the KPMG network of independent member firms affiliated with
KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved.
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© 2018 KPMG LLP, a UK limited liability partnership and a member firm Look back, look forward | 8
of the KPMG network of independent member firms affiliated with
KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved.
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Introduction
to 2018 “
Credit markets were
largely benign in 2017 and
while we believe 2018 will
see increased scrutiny and
a more cautious approach
to risk, a good credit
proposition will still attract
competitive financing.
”
Nick Dodd
UK Head of Debt Advisory, Manchester
© 2018 KPMG LLP, a UK limited liability partnership and a member firm
of the KPMG network of independent member firms affiliated with
9 | Look back, look forward KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved.
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